U.S. airline industry urges Obama to block EU carbon scheme

A US Airways plane passes American Airlines planes at Ronald Reagan National Airport in Washington April 23, 2012.Kevin Lamarque

WASHINGTON (Reuters) - The U.S. aviation industry urged President Barack Obama on Monday to file a U.N. action to stop the EU from forcing foreign aircraft to pay for their carbon emissions ahead of a U.N. meeting that will try to make progress on a multilateral solution to the ongoing aviation row.

Nineteen aviation industry groups called on the president to initiate an Article 84 proceeding in the U.N.'s International Civil Aviation Organization ICAO.L, whose governing council will convene from October 29 to November 6.

"An Article 84 action will prompt, rather than impede, agreement and implementation of a global framework for addressing aviation greenhouse gas emissions," the groups, including the U.S. airline organization Airlines for America, wrote in their letter to Obama.

The letter said the body "has a proven track record of efficiently handling an Article 84 dispute while simultaneously advancing new environmental standards."

An Article 84 proceeding is a dispute mechanism available to ICAO's 191 member states, which would give ICAO's governing council the authority to decide on disputes that cannot be resolved between states.

GLOBAL ALTERNATIVE

Environmental groups and ICAO's Secretary General Raymond Benjamin have said they oppose the time-consuming action because it could undermine efforts by the body to devise a common plan.

ICAO has been under pressure to devise a global alternative to the European Union's carbon cap-and-trade system due to strong opposition from the United States, China and other nations, but the process has been slow.

It is in the process of weighing three market-based approaches for its members to take to help them cut their greenhouse gas emissions.

Benjamin told Reuters earlier this month that he expected the council to have a draft plan by March 2013, rather than the end of 2012 as had been previously thought.

The global system must approved by ICAO's 191 members at its autumn 2013 assembly.

The U.S. aviation groups, that also included the Aerospace Industries Association, warned that if left unchecked, the EU's imposition of its carbon trading scheme could extend beyond just foreign airlines.

"If this EU breach of U.S. sovereignty ... over our airspace and international waters - goes unanswered, it almost certainly will result in other such schemes affecting a variety of sectors of the U.S. economy," the letter said.

CONGRESSIONAL PRESSURE

Meanwhile, Congress may also put pressure on the Obama administration this week with the possible passage of a bill that would shield U.S. airlines from participating in the EU's emissions trading scheme.

Last week, Republican Senator John Thune had been prepared to put get a unanimous consent vote on the Senate floor on the bill he co-authored with Democratic Senator Claire McCaskill.

The senator called off the vote because some objections were raised, a Senate aide told Reuters.

But supporters of the Thune-McCaskill bill are negotiating compromise language to address lingering concerns, said Jean Medina, spokesperson for Airlines for America.

She said the senators hope to secure enough votes for passage before Senate goes into recess ahead of the November elections. (Reporting By Valerie Volcovici; Editing by Tim Dobbyn)